Despite significant global catastrophe losses in the first half of this year, US reinsurance rates have continued to decline at the June 30 reinsurance renewal.

A report released last week by global reinsurance broker Guy Carpenter found that not only have recent disasters such as the Chilean earthquake failed to push rates up, property rates have declined by 10-15%. Overall pricing for the year is down 12%.

Predictions of an active hurricane season have also only had a slight impact on renewals, with quoting behaviour firmer than expected.

More surprisingly, while the Gulf of Mexico oil rig disaster has the potential to put pressure on rates in the energy and casualty sectors, this has yet to happen, with conditions remaining flat or down.

Factors include marine and energy accounts underwritten separately based on specific account losses and exposures, and the fact the oil rig loss is geared principally towards energy and liability exposures.

As a result, while increases of more than 10% have been seen for deepwater drilling risks similar to those of the gulf disaster, reinsurers will find it hard to justify rate increases for clients writing traditional cargo/hull accounts.

The US workers’ compensation market has changed little, with capacity and competition abundant for catastrophe layers and adequate for single claimant layers. International casualty rates have remained stable.

In Chile, treaty excess of loss and facultative risks have seen rate rises from 50-70%, but in wider Latin America property excess of loss and pro-rata lines remain unchanged.

Guy Carpenter Reinsurance Market Management Director Chris Klein says the direction of the market will remain hard to forecast for the rest of the year.

“Abundant capacity has depressed pricing, but the depletion of reinsurers’ catastrophe loss budgets may help to stabilise the market,” he said.